What is major medical health insurance?
Major medical health insurance is a term that’s generally used to describe comprehensive, robust health coverage. This is in contrast to mini-med plans, fixed indemnity plans, limited benefit plans, and policies that are meant to supplement – rather than replace – major medical coverage.
Are ACA Marketplace plans major medical insurance?
Yes, all medical plans sold in the ACA Marketplaces are considered major medical coverage (the Marketplaces in most states also offer separate stand-alone dental plans, which are not major medical coverage).
Are all employer-sponsored health plans major medical insurance?
The vast majority of employer-sponsored health plans are considered major medical coverage, but there are some that are not. A plan that counts as minimum essential coverage under the Affordable Care Act and that also provides minimum value would be considered major medical coverage. By definition, all employer-sponosred health plans are considered minimum essential coverage. Most minimum essential coverage plans also provide minimum value, but some employers choose to offer skimpy (mini-med) coverage that is technically minimum essential coverage (since it’s offered by an employer), but that does not provide minimum value. These employers are subject to a penalty under the employer mandate, and the plans they offer cannot be considered major medical coverage.
Are short-term health plans considered major medical coverage?
Some short-term health plans and some state insurance regulators specifically refer to short-term health insurance as “short-term major medical” while others do not. Some states apply many of their regular major medical health insurance rules to short-term plans, while others specifically exempt short-term plans from various regulations.
Short-term health plans that operate with a deductible, coinsurance, and a cap on out-of-pocket costs can generally be considered major medical coverage (albeit coverage that has a specified end date). These plans are generally not as robust as ACA-compliant plans though, because they often exclude various types of care altogether (prescription drugs, maternity care, and mental health care are most frequently excluded) and they put a cap on the overall amount that the insurance plan will pay for a person’s care. They also generally exclude coverage for pre-existing medical conditions.
But short-term plans that operate more like a fixed-indemnity plan (ie, with integrated caps on benefit amounts for specific services, or a per-diem payment based on days in the hospital) cannot be considered major medical coverage.
